Louisiana finds record number of workers ID’d as contractors

Record number mislabeled as contractors

The Louisiana Workforce Commission identified a record 19,956 workers that employers misclassified as independent contractors in 2015.

The agency also found employers had more than $50 million in unreported taxable wages and about $1.5 million in unreported and unpaid unemployment insurance taxes.

It was the second year in a row the agency set a record for identifying misclassified workers. In 2014, LWC found 12,782 employees who had been misclassified.

The National Employment Law Project says the practice of classifying employees as independent contractors robs workers of legal protection and unemployment and workers’ compensation insurance funds of billions of dollars each year. The practice also cheats local, state and federal governments of taxes.

Misclassification hurts the employers who play by the rules, putting them at a competitive disadvantage, according to the nonprofit, pro-worker group. Employers who misclassify workers as contractors can cut up to 30 percent of payroll and related taxes that would otherwise be paid for employees.

The practice is widespread, with state reports showing 10 percent to 60 percent of employers misclassify, according to NELP.

The Workforce Commission uses tips, complaints and information from partner agencies in doing the audits. The agency also focuses on industries where misclassification occurs most frequently, like construction and leisure and hospitality.

“We investigate every single tip or complaint provided to us by members of the public,” said LWC Secretary Ava Dejoie. “It’s essential that anyone who believes a company might be acting inappropriately comes forward and provides a tip at www.laworks.net so that we can ensure that Louisiana’s workers are protected and that our unemployment insurance trust fund is properly funded.”